Mastering the Essential Terms Every Estate and Gift Taxes Lawyer Must Understand
As an estate and gift taxes lawyer, it is crucial to be well-versed in the terminology commonly used in the industry Understanding these terms will not only help you communicate effectively with clients but also navigate the complex legal landscape surrounding estate and gift taxes. Here are 15 key terms that every estate and gift taxes lawyer should know:
Estate Tax: A tax imposed on the transfer of a person's estate upon their death.
Gift Tax: A tax on the transfer of property from one person to another while receiving nothing, or less than full value, in return.
Unified Credit: A credit that allows individuals to transfer a certain amount of assets tax-free during their lifetime or at death.
Estate Tax Exemption: The amount of assets that can be transferred without incurring estate tax.
Gift Tax Exemption: The amount of assets that can be gifted without triggering gift tax.
Generation-Skipping Transfer Tax: A tax on transfers to beneficiaries who are two or more generations younger than the donor.
Step-Up in Basis: The process of modifying an appreciated asset's value for inheritance-related taxes.
A trust is a type of legal arrangement whereby assets are managed by a trustee on behalf of a beneficiary.
A will is a legal document that specifies the distribution of a person's assets after their passing.
Power of Attorney: A legal document that grants someone the authority to make decisions on behalf of another person.
Probate is the legal process used to administer a decedent's estate.
Intestate: Dying without a valid will in place.
Residuary Estate: The remaining assets in an estate after all specific gifts and debts have been settled.
A living will is a legal document that expresses a person's desires for their final moments.
Executor: The person appointed to carry out the terms of a will.
Estate tax: A charge placed on the distribution of a deceased person's estate.
Gift Tax: A tax imposed on the transfer of money or property from one person to another, without receiving anything of equal value in return.
Unified Credit: A credit that reduces the amount of estate and gift taxes lawyer owes.
Estate Tax Exemption: The amount of an estate that can be passed on to heirs without incurring estate tax.
Gift Tax Exemption: The amount of a gift that can be given to another person without incurring gift tax.
Generation-Skipping Transfer Tax: A tax on the transfer of assets to a person who is two or more generations below the donor
Trust: A legal entity that holds assets for the benefit of another person.
A will is a legal document that specifies the distribution of a person's assets upon their passing.
Probate: The legal process of proving a will and distributing the assets of a deceased person.
Power of Attorney: A legal document that grants someone the authority to make decisions on behalf of another person.
Executor: A person appointed to carry out the instructions in a will and settle the estate of a deceased person.
Beneficiary: A person who receives assets or property from a trust, will, or insurance policy
Inheritance Tax: A tax imposed on the assets inherited by a beneficiary
Annual Exclusion: The amount of gifts that can be given to an individual without incurring gift tax.
Portability: The ability of a surviving spouse to use their deceased spouse's unused estate tax exemption.
By familiarizing yourself with these essential terms, you will be better equipped to navigate the complexities of estate and gift taxes law and provide expert guidance to your clients. As an estate and gift taxes lawyer, staying informed and up to date with industry terminology is key to achieving success in your practice.